Reminder regarding state vehicle disclosure obligations:
Requirements are the same for wholesale, auction, and dealer-to-dealer transactions
A reminder that vehicle prior damage, prior use, and vehicle condition disclosures required under state law apply the same to all transactions, even if they are with auctions, wholesalers, or other dealers. There continue to be cases before the motor vehicle dealer board where dealers mistakenly assume that because the vehicle was sold “as-is,” or under “red light,” or that the damage was “obvious,” that the disclosure rules requiring written notice do not apply. State law in Colorado regarding disclosure of all known “material particulars” has never been limited to retail / consumer transactions only. In April of 2016, a rule was adopted that outlined these and other aspects of Colorado law (as applied in enforcement and legal cases) very specifically---to address this common misunderstanding.
Regulation 12-6-118 (3) (i)
C. “AS IS” STATEMENT
A STATEMENT BY THE SELLER TO THE BUYER THAT A VEHICLE IS SOLD “AS-IS” DOES NOT RELIEVE THE SELLER OF THE DISCLOSURE OBLIGATIONS IMPOSED BY THIS REGULATION, NOR DOES IT RELIEVE THE SELLER OF ANY OTHER DISCLOSURE OBLIGATIONS OTHERWISE REQUIRED BY STATE OR FEDERAL LAW. AN “AS-IS” STATEMENT SOLELY DISCLAIMS IMPLIED WARRANTIES UNDER PROVISIONS OF THE “COLORADO UNIFORM COMMERCIAL CODE,” TITLE 4, C.R.S.
Click here for key highlights of the disclosure requirements.
Click here for a prior article announcing this new rule: Damage Disclosure - Revised Rule Goes Into Effect April 14 2016 (CADA Open Road, 4/5/2016), including the full text of the rule.
If you have questions on any legal or regulatory topic, please contact:
Tammi McCoy, VP, email@example.com, 303.282.1449
Tim Jackson, President, firstname.lastname@example.org, 303.282.1448
DISCLAIMER: CADA is not authorized to dispense legal advice. The information contained in this weekly email is intended to provide important updates and reminders regarding statutes, litigation, and regulations. CADA always advises that dealers should consult legal counsel on the specifics of any laws or regulations to ensure proper compliance.